KEY POINTS

  • Mining Bitcoin uses more energy than the whole country of Argentina
  • Texas has some of the world's lowest energy prices
  • Texas is also governed by a pro-cryptocurrency Republican

Bitcoin miners may start migrating to Texas as China continues a severe crackdown on the mining of the cryptocurrency, experts suggest.

On May 21, the Chinese government announced its plans to ban the practice of mining and trading Bitcoins in the country, stopping data centers, industrial parks and power stations from providing land and electricity to projects linked to the cryptocurrency.

The crackdown has now forced Bitcoin miners to migrate to other countries. Experts are saying Texas could be a game-changer for miners. 

Texas could be the next Bitcoin mining hub because the state has some of the world’s lowest energy prices. It also has its fair share of renewable energy, with 20% of the state’s total power coming from wind, as of 2019. The state is also led by Gov. Greg Abbott, R-TX, a firm supporter of cryptocurrency.

“We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible,” Brandon Arvanaghi, a former security engineer at Gemini, told CNBC

“It’s also very easy to start up a mining company ... if you have $30 million, $40 million, you can be a premier miner in the United States.”

Some miners have also started exiting China, looking into Central Asia and Canada as a possible destination, aside from the United States. 

“We do not want to face every single year, some sort of new ban coming in China,” Alejandro De La Torre, vice president of Hong Kong-headquartered mining pool Poolin told CNBC. 

“So we’re trying to diversify our global mining hashrate, and that’s why we are moving to the United States and to Canada.”

Mining Bitcoins is a power-hungry task. The process, which involves heavy computer calculations to verify transactions, consumes more than 120 terawatt-hours (TWh) every year. An analysis by the University of Cambridge found that Bitcoin mining uses more energy than the entire country of Argentina. 

“It is really by design that Bitcoin consumes that much electricity,” Michel Rauchs, a researcher at The Cambridge Center for Alternative Finance and creator of the tool that generated the analysis, told BBC.

“This is not something that will change in the future unless the Bitcoin price is going to significantly go down."

However, Bitcoin prices are unlikely to go down. Despite a significant drop in price the past month, some experts remain bullish of the cryptocurrency. Billionaire venture capitalist Tim Draper even suggested that Bitcoin prices could hit $250,000 by the end of the year or in early 2023.

bitcoin-2008262_1920 Representation. Scott Quinn Berkett allegedly paid $13,000 worth of bitcoin to order a hit from a murder-for-hire service from the dark web. Photo: Pixabay